MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT made this ____ day of February, 1996 by
and between FAST FOOD OPERATORS, INC., a New York corporation with
offices at 00-00 Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000
(the "Owner") and __________________, a ______________ with offices
at ____________________________ (the "Manager").
WHEREAS, Owner is the franchisee of one (1) Popeye's Famous
Fried Chicken and Biscuits Restaurant located at 00 Xxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx (the "Restaurant"). For purposes of
this Agreement, the term "Business" shall mean all operations now
or hereafter conducted by or on behalf of Owner with respect to the
Restaurant and all personnel associated therewith; and
WHEREAS, Owner desires to contract with Manager for the
management and operation of all aspects of the Business upon the
terms and subject to the conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual agreements of
the parties, it is hereby agreed as follows:
I. SERVICES TO BE PERFORMED
1.01 Engagement. Upon the terms and subject to the
conditions herein set forth, Owner hereby engages Manager at
Manager's sole expense to direct, conduct, manage and supervise the
day to day operation of the Business as further described herein,
and Manager hereby accepts such engagement. Manager agrees to
manage the Business to the best of its ability so as to achieve the
maximum operational results consistent with good business
practices, the management philosophy and policies hereto and
hereafter employed by Manager in its own operations and in other
operations owned and managed by Manager or affiliated entities.
1.02 Scope of Authority
(a) Manager shall at its own expense determine and
implement all policies pertaining to the development,
administration, merchandising, employment of personnel, production,
distribution, operation, promotion and advertising of the Business
and shall have the obligation to contract for, purchase and obtain
operating supplies and other materials and inventory required for
the operation of the Restaurant and shall generally supervise all
operations of the Business. Manager's authority and obligation
hereunder shall specifically include the right to hire, fire and
promote employees at Manager's expense.
(b) Manager agrees not to make any capital expenditure
in excess of $5,000 without the prior consent of Owner.
(c) Without limitation of Section 1.02(a) above,
Manager shall be responsible, at its own expense, for: (i)
supervising employees and independent contractors engaged in the
operation, management and maintenance of the Restaurant; (ii)
assuring the continued operation of the Restaurant, including
without limitation securing adequate stocks of food, beverages,
paper products, utensils and other supplies needed for the
operation of the Restaurant and entering into contracts with local
or national suppliers for the continuing purchase of such items,
and complying with all applicable regulations or requirements of
local health and sanitation authorities and inspectors affecting
the operations of the Restaurant; (iii) supervising the promotion
of the Restaurant's products by advertising through any of the
local media or by other means; (iv) supervising the collection,
depositing and recording of daily receipts, paying suppliers,
employees and independent contractors, and maintaining all records
relating thereto; (v) negotiating or renegotiating supply and
cartage contracts relating to the operation of the Restaurant; (vi)
supervising the repairing or replacing of utensils or items of
machinery; (vii) generally overseeing and managing the day-to-day
operations of the Restaurant; (viii) advising in connection with
the preparation of budgets, operating statements and books of
account insofar as they apply to the operations of the Restaurant
and submitting the same to Owner on a regular basis; (ix) advising
in connection with all other contracts, actions, and arrangements
which must be made or carried out, and all other things which are
necessary or convenient in connection with the continuing operation
of the Restaurant; (x) maintaining the operations of the Restaurant
at a level consistent with that which has been required in the past
of the Owner by America's Favorite Chicken Company ("AFC"); and
(xi) causing to be purchased and maintained in effect (A) such
policies of insurance as Owner may from time to time direct to be
carried against fire and extended coverage (and other hazards
against which Owner may elect to insure), (B) policies of insurance
against liability for injury or death to persons and damage to
property, and (C) policies of insurance or other coverage for
workers compensation and disability in such forms and in such
amounts as may be required under the laws of the State of New York.
All such policies shall name as insureds thereunder the Owner and
the landlord of the premises on which the Restaurant is located.
1.03 Personnel
(a) Manager agrees to provide at its expense all
personnel to be engaged in the management and operation of the
Business as Manager deems necessary or appropriate. The personnel
engaged by Manager shall be employees of the Manager and shall not
be deemed to be the Owner's employees.
(b) Lalmir Sultanzada shall be the sole supervisor
utilized by the Manager at the Restaurant. The Manager shall cause
the supervisor to oversee and direct the operation of the
Restaurant, and the duties of the supervisor shall include, without
limitation, the following: (i) inspecting the Restaurant to
maximize sales and profitability and to insure that quality and
cleanliness standards are maintained; (ii) monitoring food costs
and cash control; (iii) assisting in the establishment of marketing
promotions for the Restaurant; (iv) reviewing the schedules for
management and employees of the Restaurant; (v) interviewing and
recommending the hiring of management personnel for the Restaurant;
(vi) using best efforts to cause compliance with local, state and
federal laws concerning labor, safety and equal employment
opportunity; (vii) auditing bank receipts; (viii) preparing
periodic reports concerning the Restaurant, including without
limitation a weekly plan for the Restaurant, quarterly evaluations
of the management and employees of the Restaurant, and semi-monthly
inspection reports; and (ix) supervising the preparation and
completion of all other daily and weekly reports concerning the
Restaurant.
1.04 Garbage Removal and Parking Lot Maintenance.
Contemporaneously with the execution of this Agreement the Manager
shall enter into a written agreement with Wendnew L.L.C., a New
York limited liability company, pursuant to which Wendnew L.L.C.
will agree to undertake garbage removal and parking lot maintenance
services, either itself or through a third party, at a cost of
$1,500 per month.
II. TERM
2.01 Term. The term of this Agreement shall commence on
March 1, 1996 and, subject to the termination provisions
hereinafter provided, shall continue until December 31, 1996.
2.02 Termination Rights. Notwithstanding any provision of
Section 2.01 to the contrary, this Agreement may be terminated as
set forth below:
(a) Owner shall have the right to terminate this
Agreement, for any reason or for no reason, upon thirty (30) days
prior written notice to Manager delivered to Manager at its address
first set forth above by certified mail, return receipt requested,
or by overnight delivery.
(b) Manager shall have the right to terminate this
Agreement, for any reason or for no reason, upon ninety (90) days
prior written notice to Owner delivered to Owner at its address
first set forth above by certified mail, return receipt requested,
or by overnight delivery.
2.03 Obligations Upon Termination.
(a) In the event that this Agreement shall be
terminated pursuant to Section 2.01 or 2.02, and subject to the
provisions of Section 2.03(b), each party shall be released from
any obligations hereunder first arising from and after the
effective termination date except that Manager shall be entitled to
receive all management fees incurred prior to the effective
termination date.
(b) In the event of (i) a termination of this Agreement
by Owner by reason of a material breach by Manager of any of its
obligations or agreements hereunder, or (ii) a termination of this
Agreement by Manager for any reason other than a material breach by
Owner of any of its obligations or agreements hereunder, then
Manager shall pay to Owner, within ten (10) business days of the
termination of this Agreement, the sum of Ten Thousand ($10,000)
Dollars, such sum determined by the parties to be the reasonable
cost to be incurred by Owner in the replacement of Manager's
services hereunder.
III. EXPENSES AND MANAGEMENT FEES
3.01 Expenses. All expenses incurred in the operation,
management and supervision of the Restaurant, including, but not
limited to, salaries, wages, and other benefits and compensation of
Restaurant personnel employed in the management and operation of
the Business shall be paid by Manager. Such expenses shall be paid
first out of revenues generated by operation of the Restaurant;
provided, however, that to the extent such expenses exceed
Restaurant revenues they shall be the obligation and liability of
the Manager. Manager agrees that it shall not expend more than
$_______ during the term of this Agreement for salaries and wages
of Restaurant personnel without the prior written approval of
Owner.
3.02 Rents, Real Estate Taxes, Royalties and Advertising.
Owner and Manager hereby agree that (i) all rent for the Restaurant
premises payable by Owner, all real estate taxes on the premises
payable by Owner, and all royalties and advertising expenses
payable to AFC by reason of operation of the Restaurant, shall be
paid by Owner check drawn by Owner and forwarded by Owner to the
relevant payee, and (ii) all such sums expended by Owner shall be
reimbursed to Owner in full, prior to the payment of any management
fee due hereunder to Manager. Such reimbursement shall be made
within three (3) business days of the provision by Owner to Manager
of a statement detailing all or any of such payments.
3.03 Management Fees. Owner shall pay to Manager, as its
sole compensation hereunder, a monthly management fee for services
rendered in an amount equal to: Restaurant cash flow less the
greater of (i) Two Hundred ($200) Dollars per month, or (ii) five
(5%) of the Restaurant's monthly cash flow less capital
expenditures. For the purposes of this Section 3.03, the
Restaurant's monthly "cash flow" shall mean gross revenues from
Restaurant operations (including amounts received in payment of
sublease obligations) less operating expenses and depreciation.
The management fee amount shall be retained by Manager only after
payment to Owner by Manager, on the fifth (5th) day following the
end of each calendar month, of the greater of (i) Two Hundred
($200) Dollars per month, or (ii) five (5%) of the Restaurant's
monthly cash flow less capital expenditures. The Owner and Manager
hereby covenant and agree that the sum of Two Hundred ($200)
Dollars per month shall be an absolute minimum payable to Owner
hereunder, regardless of the Restaurant's monthly cash flow, and if
such Restaurant cash flow shall not be sufficient to remit payment
of said Two Hundred ($200) Dollars, the same amount shall be paid
by Manager to Owner from Manager's own funds on the fifth (5th) day
following the end of each calendar month.
3.04 Recordkeeping and Review. Manager covenants and agrees
that it shall keep accurate and complete records of all Restaurant
operations, including, but not limited to, revenues, operating
expenses and capital expenditures. Manager hereby agrees to grant
Owner and/or its officers, accounts, attorneys' employees and
agents (collectively, the "Agents"), access to all of such records
upon three (3) business days prior notice. In the event that a
review by Owner and/or its Agents results in a good faith
determination by Owner and/or such Agents that additional funds are
due to Owner pursuant to the provisions of Section 3.03 herein,
then Owner shall present such results to Manager in writing, and
within ten (10) business days of its receipt of such results
Manager shall either (i) remit to Owner the amounts claimed by
Owner to be due, or (ii) submit to Owner such additional
information as shall justify the discrepancy between the amounts
paid to Owner and the amounts claimed by Owner to be due. In such
event, the determination of the amount due to Owner shall be made
by Owner's certified public accountant, and such determination
shall be binding upon both Owner and Manager.
IV. MISCELLANEOUS
4.01 No Joint Venture, etc. Nothing contained in this
Agreement shall be deemed to constitute a partnership, agency,
joint venture or other similar relationship. Manager shall be
deemed an independent contractor for purposes of this Agreement.
4.02 Indemnification of Owner. Manager agrees to indemnify
and hold harmless Owner against any loss or expense, including
court costs and attorney's fees, sustained or incurred by Owner as
the result of any claim, suit or proceeding made, brought or
threatened against Owner and arising out of operations conducted
with respect to or matters connected with the Restaurant or
Business, except for any claims, suits or proceedings arising
solely from Owner's gross negligence or intentionally wrong acts.
4.03 Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties hereto in respect of the
subject matter contained herein, and supersedes all prior
agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.
4.04 Severability. In the event that any provision of this
Agreement shall be adjudged to be void, voidable or invalid for any
reason, this Agreement shall be otherwise valid and enforceable as
if the void, voidable or invalid section had not been a part hereof
in the first instance.
4.05 Assignment. This Agreement may not be assigned or
otherwise transferred by either party hereto without the prior
written consent of the other party.
4.06 Binding Effect. This Agreement shall be binding upon
the parties hereto, their successors and assigns.
4.07 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, we have executed this Agreement as of the
date first set forth above.
________________________
FAST FOOD OPERATORS, INC.
By:_______________________
By:
__________________________ _________________________
Lalmir Sultanzada, President Xxxxx X. Xxxxxx, President
______________________________
Lalmir Sultanzada, Personally
